[Congressional Record (Bound Edition), Volume 151 (2005), Part 18]
[House]
[Page 24390]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 TRADE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Nebraska (Mr. Osborne) is recognized for 5 minutes.
  Mr. OSBORNE. Mr. Speaker, yesterday a subcommittee of the Japanese 
Food Safety Commission, on Prions, which deals primarily with BSE, or 
mad cow disease, voted to pursue a course designed to open Japan's 
borders to U.S. beef. This is something that the beef industry has been 
waiting for for about 1 year, 1\1/2\ years now. And the full committee 
will vote tomorrow on opening trade with the United States, and then 
this will begin a 4-week comment period, after which it is assumed that 
borders will open. So we are hoping that by the end of the year we will 
see U.S. beef going to Japan.
  This is certainly important for our beef industry because Japan was 
buying at one time roughly $1.7 billion of U.S. beef annually. So it is 
a huge portion of our beef trade.
  Getting the border open has been surprisingly difficult, however. We 
had two cases of BSE in North America that shut off trade with Japan. 
Japan has had numerous cases of BSE in recent years. Our current 
testing system would detect one BSE-positive cow out of 10 million 
healthy cows with a 99 percent probability. So the odds of a BSE cow 
getting through our present system is practically nil. So it is a very 
reliable system.
  Contrast this with the scenario currently going on with the European 
Union. In 2004, last year, there were 756 cases of BSE in the European 
Union, 756, whereas in all of North America there have been no more 
than four or five cases in the last 3 years. There have been 189,102 
cases of BSE in Europe since BSE was first found several years ago. So 
it has been a huge amount of trouble that they have had. Yet the United 
States has experienced practically no exports of our beef to Europe. 
One would think with that scenario that we would have had a tremendous 
export opportunity.
  The European Union has blocked U.S. beef in violation of WTO rules, 
also has blocked our pork, our poultry, and genetically modified crops. 
So the European Union, certainly, has not been a good trading partner; 
and they have, as I mentioned, violated WTO rules in doing so.
  The net agriculture trade deficit between the United States and the 
European Union was a minus $5 billion last year; so we have taken a big 
hit in this area.
  Current trade talks with the European Union are very important, and 
we have an excellent trade ambassador, Rob Portman, who is doing a 
great job and we have great confidence in him, but currently we have an 
offer on the table which is one by which we would reduce our amber box, 
our farm subsidies, by 60 percent, from $19 billion to roughly $7.5 
billion.
  We have asked the European Union to reduce their trade subsidies by 
83 percent, from $80 billion down to $15 billion. The EU has countered 
with an offer to reduce their export subsidies and also their farm 
subsidies to 39 percent, which is certainly not a very satisfactory 
counteroffer. As a result, we are somewhat concerned about their 
response to this whole situation.
  It seems that tariffs certainly need to be equalized between the U.S. 
and the European Union. Currently, our tariffs on goods going into the 
European Union are roughly 30 percent. Their goods coming into the 
United States are roughly 12 percent. So here these two large trading 
partners, with economies of somewhere in the $9 trillion to $11 
trillion range, still have a great dichotomy in terms of the actual 
tariffs that are being charged against the U.S. versus the EU.
  The important thing to realize is if these trade agreements are 
formalized and if they do come into being, this will certainly change 
the nature and structure of our current farm bill.
  A note of caution here, Mr. Speaker. Brazil is waiting there and 
seeing what is going to happen. Their land is roughly 10 percent of our 
land value. Their labor costs are about 5 percent of our value. So if 
we reduce our farm programs, they are going to be a formidable 
competitor. We certainly think our farmers can compete with anyone in 
the world; but when the playing field is that unequal, it can be a 
problem. So it is really important that we realize that trade 
agreements are tremendous if they are honored and if the playing field 
is equal, but they can be huge liabilities if one side honors the 
agreements and the other does not.
  So far with the European Union that has been pretty much the 
situation. So in Congress we need to look at the next WTO round very 
carefully.

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